Opinion: ECB has a plan for markets and is looking for reasons to act

The European Central Bank this week has to convince markets it is ready to act on events that may never happen.

The central bank’s governing council meeting on March 7 will consider whether the eurozone’s economic slowdown will worsen. That will determine the policy steps the ECB might take, or the ones it might hint at taking in the future — “forward guidance” in central bank lingo.

ECB insiders say the main step under consideration is a new long-term liquidity facility for eurozone banks. The “targeted long-term refinancing operations” (TLTRO) the ECB launched in 2014 and 2016 provided banks with four-year loans at low interest rates, on condition that they increased their lending.

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